← The "What is Money?" Show
The "What is Money?" Show
WiM007 - The Saylor Series | Episode 7 | The Virtues of Strong Money
01:31:32
Michael Saylor joins me to discuss anthropology, energy, and technology from first principles as we build the intellectual foundation necessary to truly grasp the historic significance of Bitcoin.
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- [00:03]
Michael Saylor
Technologies that are dominating today, they're dominating because they're able to deliver force faster, harder, stronger, smarter. So if we ask the question, what is money? Money is the highest form of energy that human beings can chann. Bitcoin is channeling human ingenuity into making it better. And every commodity is channeling human energy into making it worse. The lowbrow or the historic colloquial term is hodl, right? Hold on for dear life and just hodl or save, whatever. And the highbrow term would be adopt as a Treasury reserve asset.
- [01:06]
Robert Breedlove
Hey guys. So as you learned by watching the what is Money Show, Bitcoin is the single most important asset you can own.
- [01:13]
Unknown
In the world today.
- [01:15]
Robert Breedlove
And so this begs the question, which I'm often asked, how does one build their Bitcoin position? And the strategy really is simple. I suggest first you decide on an initial portfolio percentage allocation and a target portfolio percentage allocation. Go ahead and establish the initial position with a one time buy and then start dollar cost averaging towards your target portfolio percentage. And you can also complement this by buying bitcoin price dips to further increase that position and reduce your cost basis. And finally I suggest to everyone to take custody of their Bitcoin to move all of their Bitcoin into self sovereign custody. Because again, Bitcoin left on an exchange is not bitcoin, it's a Bitcoin iou. And for those of you living in the US there's no better choice than Swan Bitcoin to do all of the above. So Swan lets you set up automatic recurring buys for Bitcoin, also lets you facilitate one time buys for buying price dips. And finally they let you set up automatic recurring withdrawals into cold storage, which is a really big deal. And all of this they provide at the lowest fees in the business, approximately 0.99% per year for weekly buys of $50 or more, which is about 60, I'm sorry, 70 to 80% less than Coinbase by comparison. And the best part, Swann is a bitcoin focused education first company. They publish great content on their Swan Signal live podcast. They publish a lot of content in their newsletter and website. And their team is just the absolute dream team of Bitcoin, I would say. Check out their roster. It's growing every day, but it's a super impressive group of individuals. And so with that I would highly recommend you check out swan bitcoin.com breedlove. You get $10 in free Bitcoin for signing up and it lets you stack sats with Myself and the rest of the Swan team as we continue the fight to restore freedom, truth and virtue in the world through bitcoin. Alright, thanks. Alright, guys, we are back with Saylor series episode seven. And today we're going to be diving even deeper into bitcoin theory. And as always, if you guys haven't seen episodes one through six that led us to this point, I highly suggest you go and check those out. They build a lot of foundation that we draw upon continually as we progress further into the series. So today we're going to discuss bitcoin as a monetary missile, which, if you remember from episode one, missiles are one of the quintessential Stone Age technologies. So we're going to draw analogies to that. We're also going to talk about bitcoin as the creature that never sleeps, akin to the great Kraken itself, and why this makes it a superior form of money. We'll also look at the effects of humans intervening in complex systems and what that does to complex systems and the consequences that it generates. And then finally, we'll look at some of the reasons why bitcoin may actually be the sole sound store value for the 21st century. We'll compare it to alternatives and draw reasons why it is superior across a number of dimensions. Then we're going to get into the television concept of Via Negativa and how it relates to bitcoin and technology more generally. Finally, we get into a really interesting aspect of bitcoin not often discussed. And that is we look at the fanaticism of bitcoin maximalist as an asset, as a value creator for this asset class itself. And that leads us naturally into the discussion of bitcoin as a religion. So, going to go deep again today. I'm really excited for this one. So let's dive in.
- [05:21]
Unknown
Bitcoin is a monetary technology that we're able to deliver with much more force. Force and the physics definition being mass times acceleration or mass also being equal to energy. So we're able to channel this energy in a very targeted and specified format at a very high speed and recalibrate almost instantaneously to always optimize our yield. Right.
- [05:47]
Michael Saylor
Doesn't it sound like a cruise missile or a projectile weapon?
- [05:53]
Robert Breedlove
Right.
- [05:55]
Michael Saylor
And we're back to the issue of what happened to the guys without the guns when the guys with the guns showed up to the guys without the airplanes when the guys with the airplanes showed up.
- [06:08]
Unknown
So you're holding the high ground, the proverbial high ground, behind the wall of encrypted Energy. But you can also send these financial, or I guess you call them financial weapons in a way out in a very targeted fashion based on what the market's signaling, what's the demand for loans or what have you.
- [06:31]
Michael Saylor
In theory. Isn't a crypto bank the smartest, fastest, strongest financial entity in the world? Right, because it's going to be working while everybody's sleeping. Just like YouTube and Facebook and Apple networks, they're working while you're sleeping 24, 7, 365. And to a certain extent you see that metaphorically. If you just look at a crypto exchange and you look at the trading of bitcoin and it's working while you're sleeping. And if you try to watch it, you get exhausted. All traditional assets are constructed to trade from 9:30 in the morning till 4 in the evening because human beings needed to watch over them. And that's about the maximum endurance of a human being. And bitcoin, when you go beyond that, you're going from 35 hours a week to 168 hours a week. It's five times as much. People think, oh, it's a little bit more. It's not a little bit more, right. It's 5x the bandwidth, just the trading. Then when you consider that it's trading every hour in every currency pair everywhere, everywhere on a host of exchanges, this is extremely high bandwidth price discovery, transparency, the highest bandwidth price discovery, the highest bandwidth market of any security, of any asset ever. Right? I mean, Bitcoin really is the perfected asset, or at least the apex asset in the financial jungle, because it's the creature that never sleeps. That's an octopus that's working everywhere, all the time. The metaphor, Kraken, it's a pretty good metaphor.
- [08:42]
Unknown
Yeah. Really?
- [08:43]
Michael Saylor
Because it's always going and it's never stopping. And remember, remember back to our previous discussion, I was saying in Jurassic park, you know, the guy picks a fight with the little dinosaur and then he realizes there's a hundred of those little dinosaurs and they don't sleep. And when you pick a fight with the swarm and the swarm doesn't sleep and you sleep, you realize you're going to lose, you're doomed. There's that point when you realize you're doomed because you can't keep up with a software creature with a million heads that is continuously working everywhere all the time. And here's the thing, you know, the thing that's working that's dominating the market in bitcoin all the time. It's the strongest version of the creature in that domain. Not the weakest, Right? Right. The weak parts of the herd get called out, they're being deprived of their capital, they're being squeezed out. And you see it with like the Mount Gox disaster, anything that doesn't quite work. And so this asset class is a living asset class. And its strength comes from the fact that it's being developed. It's not constrained by the lowest common denominator, it's strengthened by the highest common denominator. If there's somebody in the world, if there's an exchange in the world that can actually do this better, faster, stronger, and it comes onto the bitcoin network, they will set the price. Even if you're just hodling, if you're just sitting there holding an asset. Let's say I'm holding $100 million of Bitcoin and I'm wishing it would go up in value. And then let's say there's a million cassillion laws in the United States that prevent people from trading index futures on bitcoin. But somebody in Malta is able to do it, or somebody in Singapore is able to launch that exchange. So Singapore launches an exchange that matches billions of dollars of forward index buyers or option buyers to billions of dollars of call buyers, that attracts tens of billions of dollars of capital in the market because it solves the yield curve problem. Let's say hypothetically, somebody on a centralized or decentralized exchange or lightning network solves a yield curve problem. If I could give you 8% risk free yield on 10 year money, presumably you can take $100 billion and you can take that money and you can short, fiat, short the dollar, go long, the bitcoin squeeze, the 8% yield on $100 billion, make yourself $8 billion a year. If you can figure out how to do that in Singapore, you set up in Singapore, you do it in Singapore, what happens to the price of bitcoin goes up? What happens to the Hodler sitting in Schenectady, New York that never did anything, that didn't touch it, that doesn't know about it, that doesn't understand it. With their little one bitcoin, it's been strengthened, the network is getting stronger based on the highest common denominator. Anybody in the world with a better idea that plugs in the network is lifting everybody. That's totally different than a conventional centralized, traditional structure where one regulator might create one set of rules that constrain and hobble.
- [12:21]
Unknown
Yeah, right. The asymmetry has been inverted right from the Great Wall of China. Or if there's one failure, at any point, the whole thing's compromised. But now it's. You inverted that asymmetry such that if there's one benefit, it benefits everyone.
- [12:40]
Michael Saylor
And that's what it's like when you got a swarm. If the herd is attacked by a predator and one of the creatures figures out how to kill the predator, the ones that couldn't figure it out die. The ones that do figure out live, they procreate. Pretty soon they can all kill the predator, right? They all have that immunity. That's herd immunity, whatever that might be. And that's the beauty of Bitcoin. I had this tweet. I put it out there. I said, lions get tired of facing the antelope. Lions complain to the ranger. The ranger hobbles the antelope. Lions get fat, dumb and happy. Antelope all die. Lions all die. Range of blame's on the weather. And that is a metaphor for a lot of stuff. Generally, it's a metaphor for how you destroy a crypto network by trying to make transaction fees lower. It's like someone complained about transaction fees. So we try to change everything to drive the transaction fees down, because somehow it's abomination in the eyes of God that people get charged for transactions. The antelope ran too fast. Not fair. The transaction fees were too high. Not fair. Make them lower. We'll hobble them for you, okay? It's also a metaphor for interest rates. Interest rates are too high. I can't afford a loan. Make them go down. It's also a metaphor for competition. My competitor goes too fast. They're making it too difficult. Slow them down. Make the foreigners stop that. Make somebody do something, right? It's somebody trying to regulate or manage something because they think it's a problem. But at the end of the day, you're messing with Mother Nature, right? You're in a war with nature. It's not going to end well. At the end of the day, lazy lions should die. And slow antelope get eaten fast. Strong, healthy antelope procreate, and fast, strong, healthy lions feed. And the lions get better, and the antelope get better. And they live in an ecosystem. And if you remove the predator, you know, all sorts of crazy bad things happen.
- [15:19]
Unknown
You throw off the balance. This goes all the way back to your original point that there's no fair fight in the world, right? And that when human intervention tries to make that fight more fair, the intervention into a complex system throws off all these unintended consequences. And I think that is one of the things that's gotten us into the situation we're in today with low and negative interest rates.
- [15:46]
Michael Saylor
Right?
- [15:46]
Unknown
We've constantly trying to introduce an economic analgesic to paper over the business cycle or paper over losses. We've distorted the natural price discovery function of the market. Now we're in these totally asinine times with stock market at all time high and 40 million people unemployed. And this is one of Taleb's main themes, is human beings have to strive to not intervene with Mother Nature. If Mother Nature has been executing a certain strategy for a long time, we have to assume that it's being done for a reason. No matter what science tells us.
- [16:30]
Michael Saylor
Interest rate is the time value of money. But if interest rate is the time value of money, it's the time value of energy. And if it's the time value of energy, interest rate is the value of time. And maybe if we come back to thermodynamics, the rule of thermodynamics is time cannot go backwards. Entropy is time must move forward. Trying to drive interest rates to zero or negative is a war on time. You're trying to make time go backwards. You're trying to make water flow uphill. You're trying to reverse gravity. You're trying to reverse the laws of thermodynamics. It's me saying to you, robert, will you give me everything that you own? Give it to me. You go without, I'm going to keep it, and when you die, I'm going to give a third of it back to your heirs. And so the only way you would do that is if you thought the future of your life had negative value. Like if you knew you were going to be a serial axe murderer killer, and you knew it in advance, and you thought, you know, I should be deprived of the future of my life because I'm really a liability to humanity. Maybe. But if you actually thought that the future had any value, you couldn't make that trade. No rational person would say, I'm going to give you everything I have in return for half of it back when I'm dead. It's so more erotic, right? It's just insane. And so when I'm trying to drive the interest rate to zero or negative, I'm actually trying to reverse time and make it run backwards. I'm first trying to stop it, and I'm trying to make it run backwards. I'm trying to reverse entropy. I'm trying to put the genie back in the bottle. Thermodynamics the laws of physics, the laws of humanity, they all say it can't be done, and only something catastrophic will ensue.
- [18:51]
Unknown
Let me ask you, this is interesting. We have a legacy financial system that's trying to grind against or move countervailing to the laws of thermodynamics, or the thermodynamic arrow of time. And here we have this new system introduced in the form of bitcoin that nearly perfectly mirrors the laws of thermodynamics. It aligns itself with the arrow of time and the thermodynamic arrow of time. It seems almost serendipitous that bitcoin is released at this time when the system is starting to come apart in this decade. Do you think this is almost like an autoimmune response by the global human hive mind?
- [19:41]
Michael Saylor
Yeah. Well, like I do, because, you know, look at what Satoshi put in the genesis block, right? It's pretty clear that that Satoshi was troubled, was inspired, antagonized, irritated enough to do this. Humans solve problems. And so if I introduce a pathogen into your body, right, your body reacts. Living creatures react to protect themselves. So if someone is sensitive, sensitive to a given issue, and Satoshi was sensitive to financial integrity and obviously had some decent sensitivity and awareness of Austrian economics and the perils of inflation and the moral hazard of bank bailouts. So that was a sensitive individual that tapped into a bunch of other sensitive nodes, individuals who shared that. And it's almost like I pricked you with a needle and I introduced this little pathogen, and then you swallowed that. And it was an inflammation, and the inflammation grew and festered, and some antibodies built, an organism built, and the organism got bigger, and it got bigger, and it got bigger and. And then it got fed. If we had zero inflation, if the US dollar monetary supply expanded by 0% for the past decade, how much passion would there be in the bitcoin community compared to the amount of passion there is today?
- [21:41]
Unknown
Much less.
- [21:44]
Michael Saylor
We're back to this issue. It's a great technology, and it's inevitable. We're back to this issue of Zoom was inevitable. YouTube was inevitable. Virtual business models were inevitable. Bitcoin was inevitable. But it sure did get accelerated by certain things that happened. Bitcoin had 10 years of, I would say, a 7% forcing function with the dollar, and it got goosed a bit harder with Argentina and other developing world countries, the anxiety of Syria and the anxiety of Iraq and the anxiety in Africa and the anxiety in South America and the like. So those stressors and that Goosed it. The currency wars pushed it a bit harder. Then I think the pandemic crisis lit it on fire. I could say, Robert, there's no way I'm talking to you if there's no pandemic.
- [22:54]
Robert Breedlove
That's right.
- [23:00]
Michael Saylor
I don't think for a second that bitcoin wouldn't be successful without me. And I don't think that it's anybody going to stop it. But I do think there's an avalanche of energy, of individuals and corporations that got inspired and driven into this ecosystem because of the pandemic. Again, back to war. Wars cause paradigm shifts. This year there's a currency war that's a war on money as a store of value. That war on money as a store of value creates massive dislocations in the bond market and the equity market. And there are consequences to everything. Ultimately, bitcoin is a platform, an antifragile, fragile, but scalable platform serving as a store of value. The best possible circumstance would be if the entire world plunged into a war where value was dissipating in every currency, everywhere, at a rapid rate. I think it describes what we have today.
- [24:23]
Unknown
I think it's exactly correct. And it's almost as if the Mongols breached the Great Wall of China. The Mongols being central banks that are basically robbing value from currency. And it's giving people more of an impetus to evaluate alternatives and for those that see it, to retreat behind the wall of encrypted energy, you have to defend your life force, your energy, your money from confiscation. And the most prevalent form of confiscation in the world today is inflation.
- [24:57]
Michael Saylor
I guess that's what makes it takes us to the next subject, which is bitcoin is a store of value. Bitcoin is an incredible store of value. I think that's its primary use case or it's killer value proposition now and probably for the next decade and maybe forever. But the entire world is looking for a store of value right now. And you have to look across $250 trillion in assets. If we think that asset inflation is running north of 10%. And I think it is. I think it's pretty clear it is. And if you have capital, you have to choose between bonds, $80 trillion in sovereign debt, or corporate debt, or municipal debt, or mortgage backed securities, or you got to choose equities, tech equity, conventional equity, or you got to go to precious metals, or you go to real property, real estate property. And when you look at all those things, the problem is half of all real estate. Is impaired because of the political response to Covid. And it's not likely that's going to change in the next 10 years. We probably got 10 years of uncertainty about real estate assets, especially commercial real estate assets. The other challenge is with real estate is the taxes on it. It's liquid, immobile and highly taxed. Generally, real estate is taxed annually everywhere. It's just a question of whether it's 20 basis points or 200 basis points. That makes real estate a challenging store of value. And that takes you to bonds. Bonds have worked as a store of value. When interest rates keep going lower, you can see that everybody that's been on the bond train and benefiting from it, they're screaming as loud as they can. They want negative interest rates. Because they're like the secret to success is lower the interest rates 50 basis points a year or 100 basis points a year. And it's a no lose proposition for them. But at this point it's getting kind of ridiculous, silly because when interest rates go negative, everybody takes their money out of the bank. It creates bank runs, all the bank systems break. It's kind of a morally bankruptcy. I mean, a lot of people, they don't really understand that they're being abused at 2% instead of 5%. But pretty much everybody can figure out that when you're being billed 1% of the money you have abused.
- [27:49]
Unknown
Yeah. And again, if you look at money as that insurance policy on uncertainty, all of a sudden that policy has negative value. It's just asinine. It doesn't make any economic sense.
- [28:01]
Michael Saylor
Yeah, so that doesn't work. And so where does that take us? It takes us to equity. We got an equity bubble. It's a very crowded trade. But the real issue with equity as a store of value is that the revenues get taxed, the sales tax, the cash flows get taxed as income tax, the expenses, the cost structure gets taxed as employee and payroll tax. Then the trade gets taxed as a tariff. Then you have the existential threat or regulatory risk of onerous regulations. You pick up the paper and see, maybe Australia is going to bill Google every time they link to a newspaper article. And then if Google doesn't link to newspaper articles, they're going to get fined for not linking to newspaper articles. As these things become more powerful, they become regulated. Utilities and politicians start to think that they can't and should be regulated. And maybe with good cause. If there's only one provider of information anywhere in the country, then it definitely becomes a political issue. So that's the challenge with equities. Eventually they might work for two, three, four years, but they're valued as a multiple of cash flows. So if all of the liquidity in the civilization gets squeezed out of debt, when interest gets to zero, the government and the Fed owns all the debt. Okay, they bought me out, now I got to put it in something else. So I jump on equity. So now equity's double, but now the P2E is double or triple and the revenue multiples triple. What's the value of an equity? The value of equity should in theory be the tangible assets on the balance sheet plus the sum of the discounted cash flows. And so people are using equities as store of value today. In fact, you can make the argument that equities are the most popular store of value for the majority with the Robinhood trading. They're all buying Apple, Amazon, Facebook, nasdaq, spiders, everybody. Even though nobody thinks revenues are going up this year, nobody thinks earnings are going up this year, but equity values are double this year. That means that they're getting riskier. If you contrast bitcoin to equity, the problem is if the price of an equity goes up by a factor of 10, you've got more risk because it's delaminating from its underlying cash flows and its fundamentals, because it is a centralized regulated entity. And the only way that the cash flows are going to grow into that value is they keep raising the price. And if they're monopoly and they raise the price, the regulators will react. If they don't raise the price, they can't grow into the multiple. You're a chicken and the egg thing. And if there's any competition and their cash flows deteriorate, eventually you're trading at 200 to 1 or 200p to E. And then any degree of disappointment causes massive volatility. How are they different than Bitcoin? Well, Bitcoin's value proposition is the liquidity. It is the store of value. That is it. If you're going to function as money, you want to be a single celled organism. The simple like the algae, the base layer of the ecosystem is plankton or bacteria or single cells. You don't want to be a vertebrate, and these companies are vertebrates with a brain and a backbone. And that means, for example, WeChat or TikTok, it has a headquarters and if it's in the wrong country, it gets its head chopped off. And Apple and Facebook, they're subject to a certain court, a certain country's Jurisdiction. So that means they're foreign somewhere else. They're vertebrates. If you're a vertebrate, I can kill you with a needle, right? Like a human being I can figure out how to kill, right? There's a heart, I take a needle, I poke, there you're gone. Very fragile. Hard to do that with a swarm of hornets. Hard to do that with all the plankton in the ocean. It's very difficult to do it with an amorphous, decentralized invertebrate of some sort. So if you want to store value, you don't want a company that's valued based upon the ability to engineer hyper complicated products that have to keep getting upgraded. You want something which is simple, that can just keep things simple. This is again where some of the crypto enthusiasts, they keep wanting to tinker with a better blockchain, a better crypto, a better. They never saw an upgrade they didn't like, so they just want to keep revving it every year. This is like it's the iPhone version 37. There's a fundamental difference, which is if there's a bug in iPhone version 37, everybody in the world's heart doesn't stop, right?
- [33:26]
Unknown
I think this analogy you're using with the simplicity of plankton being the base layer for the ecosystem is apt. I want to say plankton makes up the majority of the biomass on the planet by like a pretty substantial margin because it's so simple and it's so efficient at converting solar energy into biological energy. Right. And then it feed it is the base layer for this multiplicity of layered ecosystem that we have in the world. And another thing I think is interesting is you make a great point that equities are becoming more risky as they increase in price because they're delaminating from their valuation fundamentals, as you said. And bitcoin's the opposite, right? Actually the more valuable bitcoin is, the more secure its network, the greater the liquidity, the more resistant it is to attack. It's a very interesting counter trade to equities as a store of value.
- [34:24]
Michael Saylor
Of course, if you have an individual entity with an individual headquarters and a CEO, as it gets bigger, it becomes a bigger target. Maybe everybody in your home country loves you, but what about everybody in every other country, right? So you don't want a head and you don't want to be a target and you don't want to be valued based on cash flows. If you're going to be money like, well, it's. They're the Right. But they're the right creature to be building a device or maybe creating an exchange or creating an application, because there I want the software to run a billion times faster. So it's okay to have one company write software, but the question is, I want it to run a billion times faster, but do I need it to last for a thousand years? And the answer is, I can throw my phone away and western civilization will not end if I lose my phone or if you screw up my phone. Right. It will not end if I put all the energy in Western civilization or that's prejudicial. If I put all the energy into civilization or of civilization into a network. Crypto network. I can't afford for someone to like ship a buggy release, so. And again, what people forget is if I put a billion dollars into Bitcoin on January 1, 2021 and I don't touch it for 100 years, the thing is working. It's truly insanely great. Technology is. Okay, we're back to Nicholas Taleb is haunting our thoughts via Negativa. Right? Ah, yes, ADD by taking away. Insanely great technology is when it does a thing without you doing a thing.
- [36:32]
Unknown
Right.
- [36:33]
Michael Saylor
You know, a junior technologist, they create gadgets. I have an app, I have a mobile application. It has 150 features and 150 buttons, and if you click and there's a billion different things it can do depending upon the combination of the buttons and the features you click on. Okay, that's one thing. How about another mobile app? You download the mobile app and everywhere you walk on earth, it kills all your enemies and gives you infinite food and water and protection and plays whatever music you wanted to hear around you without you touching it. Hands free. If I walk around and someone walks behind me and they do everything I want before I ask them to do it without me opening my mouth, isn't that a heck of a lot better than a gadgety thing with features?
- [37:26]
Unknown
Yeah, it's higher utility, right?
- [37:30]
Michael Saylor
It's saying exubery, the design's not done. It's not a perfect design until there's nothing left to remove. And so if I told you, take all your money, put it into Bitcoin, and then you'll be rich and happy and prosperous for all of eternity without doing a single transaction, that's a lot better idea.
- [37:56]
Unknown
Right? That's a great point.
- [37:58]
Michael Saylor
I think more features and more gadgety things. I just need it to always work.
- [38:06]
Unknown
Right, right.
- [38:07]
Robert Breedlove
Right.
- [38:10]
Michael Saylor
Is vapor around me.
- [38:13]
Robert Breedlove
You're right.
- [38:13]
Unknown
Absolutely. Just to Give the listeners a little bit of context on Via Negativa. For those who haven't read Taleb, his canonical example is in his book the Black Swan, where you can see as many white swans as you want, but you can never prove by virtue of that evidence that all swans are white. But with a single sighting of a black swan, you have disproven that all swans are white. So the moral of the story is that disconfirmation is more rigorous than confirmation.
- [38:49]
Robert Breedlove
Right?
- [38:49]
Unknown
And I think that's getting to your point here, is that it's getting stronger by taking away, right? Your factual base on which you're building your premise and strategy in the world is strengthened by disconfirmation more so than it is confirmation.
- [39:08]
Michael Saylor
And I'll give you another example that we see all the time with Google. You go into Google, you ask the wrong question and misspell it and it gives you the right answer. That's a truly great piece of software. You ask the wrong question and it gives you the right answer because it knows what question you should have asked, it knows how you should have spelled it, and it said, we're going to answer this question for you instead. Because the odds that you really wanted to know this question answered is 99 million to 1. The odds that you really were asking a unique question that seems foolish and misspelling a popular name while you're asking, that's one in a billion. So if you really wanted to ask the wrong question the wrong way, you try twice. But 99.999% of the time they give you the right answer to the wrong question. And they do it because they build like this very fault tolerant, common sense, rational interface. So back to the store of value, right? Bitcoin is, it's an ideal store of value because it's got the ability to convey your energy not across 10,000 miles, but across 10,000 days. 30 years in the future, 100 years in the future. Most people when they're investing in assets, they're taking this very short term view of the next month, the next year, the next two years. I find that if you're looking at a three year time frame, everything gets very, very noisy and complicated and there's all these debates. But if you were going to end the debates, go out 100 years and just take $100 million and go through the exercise of giving it to someone, your heirs. Heirs, heir in a hundred years, and then all of a sudden all this noise drops away. Can I put it in real estate? No, it'll be Taxed out of existence in 100 years. Can I put it in gold? No, 98% of it will be gone if 100% of it isn't gone in 100 years because it'll be mine to death. Can I put it in Fiat? No, it's going to be inflated to death. Can I invest it in a company? No. Name one company that's around today, that was around 100 years ago, that hasn't been diluted, recapitalized, et cetera. Can I put it in a stock index? Well, you're trusting a human being to rebalance the index over and over again. What stock index do you trust for the next hundred years? And by the way, it's got counterparty risk at the nation state level. Nation might not be there and 90% didn't make it. So what are you left with? The truth is when you just do that thought experiment, it's pretty obvious. You put it in, you would put it in a crypto network and a decentralized proof of work network. If the adherents, the maximalist, were fanatic zealots about protecting the integrity of the network against meddlers who would screw it up. If the network is supported by those with a religious conviction to the network such that you could imagine a hundred years from now there will still be people protecting the network. The phrase is keepers of the flame, right? Every great religion, every great institution has keepers of the flame. And there must be passion. Do you believe in your religion? Do you believe strong enough that you'll flee persecution to, to continue to practice it? Right. That the United States was built on the foundation, the separation of church and state. And it's a pretty important and interesting metaphor. People came here because they could practice their religion. That's why they came here. And they came here because their religion was above their government. They would not sacrifice whatever it is they believed in. If you look at every institution that lasts more than 100 years, name them. Harvard University, Cambridge, Oxford. The Catholic Church, Islamic sects. Certain. The Jewish faith. There's not that many. It's like there's churches or religious sects and then there's some educational institutions. And I see the educational institutions being shaken at their core this year. Right. I mean, literally, you could have said for 500 years, you know, Ivy Leagues elite universities, they are stalwart institutions. They have lost a huge amount of credibility this year when you send all your, all of your students home and you close the campus and people are studying virtually people's affiliation to the, to the bricks and mortar of the institution has been dramatically weakened unless they morph into a virtual institution. The virtual institutions, by the way, have dramatically strengthened, right? Your affiliation with YouTube and facebook and Apple TV and bitcoin has dramatically strengthened. And square cash, if it's virtual. And your affiliation with the bricks and mortar physical institution has been weakened. And those that will survive have dematerialized and virtualized, right? And they've learned how to project their ethos in cyberspace. So, yeah, back to good store of value. You need people, human beings, flesh and blood, people that are going to keep the flame. And the flame of bitcoin is the node and the mining rig. Imagine we're getting into bitcoin as religion or as faith now. But imagine a thousand years ago, I want to keep a religion alive. I have an altar in my home. Every wealthy person had a chapel in their home. If you look at religions, right, you go to the far east, there are altars in Buddhist, Shinto, other faiths. So the idea of an altar or a shrine or a cathedral or a church, these are structures where people go to worship. And the worshiping is the feeding of the flame. And oftentimes during the worshiping, they're tithing. And they're channeling 10% of their money as energy into these religions in order to keep them relevant. If you look at science, if you look at fantasy, fiction and fantasy, where they have gods, the strength of the God is a function of the devoutness of the worshipers, of the followers. Such and such was worshiped as the God of the God of the forest. And they are worshiped as the God of the forest. And all of their adherents, all their acolytes, are feeding energy to the God of the forest. And when they're no longer worshipped, their energy goes away, right? If you lose your faithful, if they won't feed you with the fire of truth, with the energy that you need, your efficacy falls and you die. And so how do you feed a fire, right? If it's a physical fire, you have to throw wood on the fire. How do you feed a religion? You have to tithe. You have to, you know, the catholic church, any church, you have to give it money and maybe you have to give it your life service. Onward Christian soldiers. I will fight for the cause. I will donate to the cause. That's how you feed a religious institution. How do you feed a crypto network? You got to spin up facilities of encrypted energy that adhere to the protocol. Every time a miner comes on board, it's feeding the fire. Every time a node comes on board that's going to certify and validate, it's protecting, it's creating one more chain and the fault tolerant structure. And that's why a smaller crypto, a crypto that's a technical experiment, that's an application, isn't a good store of value because if the people are willing to fork it, if they want to fork it and abandon it in order to implement a new technology, then the flame dies. And so it's pretty clear that bitcoin maximalists, they have a lot of the faith and the conviction of true believers and any religious faith for the past 2000 years. And why wouldn't they? Because they share the same values. Their values are truth, nature, natural laws, laws of physics, laws of thermodynamics, math, Austrian economics, no such thing as a free lunch. Self reliance, honesty, fairness and technology advance. They share those values. They're taking their monetary energy and tokenizing it on a bitcoin network. With Bitcoin. Bitcoin is that single shared store of value. If money is energy and energy begets life and, and a crypto decentralized network gives you sovereignty, that's a path to immortality. And that means that everybody in the bitcoin community that believes in this for the long term is engaged in the pursuit of immortal life. And pursuit of immortal life sounds like a religious mantra, I think. And I grew up in the Southern Baptist faith, so I'm very familiar with the ideology of Christianity. And pursuit of a mortal life is pretty paramount there.
- [50:37]
Unknown
I did as well. That's interesting.
- [50:41]
Michael Saylor
And if bitcoin is a store of value for 100 years, then it is a technique or it is a. Yeah, it is a technique through which you can project values through time. So if you're not, if you're not actually providing for a better life for yourself, you're providing for a better life for your family, or you're providing for a better life for your loved ones or friends. Or perhaps your values are you want to support a dog park and you want to endow the dog park for 100 years. Or what if you want to endow environmental cost, or save the seals or save the whales, or it doesn't really matter what the cause is, cure cancer, do this, go to the stars. When I die, I want all of my wealth to be used to make education free for everyone forever. That actually is one of my values. And I have a foundation, the Saylor foundation, which gives away free education to hundreds of thousands of people. That's a value Other people want to go to outer space. If I can channel my energy and put it into a network, and that network can be used to fund, empower, an endowment that will do that thing, then that Bitcoin network or that crypto network is going to be my mechanism for achieving all of my hopes and aspirations from now to eternity.
- [52:18]
Unknown
That's an amazing point. And I would even conceive of that as a mechanism almost of the afterlife. Right. It's a way to carry your will beyond your own life and the other. The American mythologist Joseph Campbell. He described religion as a story that points toward the transcendental mystery that we all experience but cannot articulate. So all religious traditions, mythological traditions, are stories pointing toward a higher truth. And I find it interesting that Bitcoin has higher truth embedded in code. Right. This 21 million numbers is quite literally transcendental. We can't touch it, we can't change it, we can't do anything about it. Every 10 minutes, it's promulgating the most indisputable truth that we've ever had. It's true global consensus. It's not just a metaphor, I think, to call Bitcoin religious. It quite actually is religious.
- [53:33]
Michael Saylor
If you worship science, if you worship the laws of physics and the laws of thermodynamics and mathematical clarity, then Bitcoin's your religion.
- [53:47]
Robert Breedlove
Right? Right.
- [53:50]
Michael Saylor
And that's what takes us out of the range of simple asset debates. If your time horizon is 10 years, we can debate Bitcoin this versus Apple stock that versus Amazon versus bonds versus whatever. And when your time horizon is three years, by the way, it all is just in the domain of macro traders and cute arbitrageurs. Everybody wants to tell you about the Fibonacci, this triangle thing, and that's overbought and this is oversold. And my head kind of explodes trying to figure that out. But the truth is, I just don't care. Being right in the next two years strikes me as being a bad idea. Because in order to be right as a trader in the near term, I have to turn off the part of my brain that thinks about what's true and honest and morally hazard or rational. You literally have to be like, I know it's stupid to go this way, but since everybody else is going to go this way, I'm going to do something stupid now. Because I think I'm less stupid but more stupid stupid than they are stupid. It's just. It's not a way to live.
- [55:02]
Unknown
The market can stay irrational longer than you can Stay solvent, right?
- [55:07]
Michael Saylor
Yeah. And the problem is like if I lose by trying to act stupid, then I really was stupid. And if I win acting kind of irrational, crazy, then I don't respect myself. And meanwhile, you know, a much simpler idea is just figure out what's going to go up by a factor of 100 or 1000 and just go stand there and wait for entropy to take its course and wait for gravity to take its effect and let the water flow downhill and let the fire burn. And don't dash around while the fire is burning everything. Stand up and watch it. So the solution there is you move from three years to 10 years and then you move from 10 years to 100 years. And at the 100 year time frame it's pretty clear what's an asset and what's a store of value. And that's where it's just very obvious. A bitcoin is a store of value if its believers have religious conviction in becomes very simple. Now if you step out to a thousand year time frame and you say what's this thing got to be in order to last a thousand years? It better be the worship of math and the laws of thermodynamics and the laws of physics and Einstein and Newton that might make it. And if we just focus upon that and don't let all this other stuff get mired, I mean, that's reasonable. I mean people have been studying and honoring math and algebra for 2,000 years. They've been honoring calculus for 400 years. You could say this is truly the adoption of economics as a science. It's that critical inflection point where economics went from being a political preference to being a science. And if you adopt it as a science, then you actually get massive advantages technically. And if you reject it. I know, I guess it's kind of like the guys in the dark ages. And they could accept calculus or they could reject calculus.
- [57:37]
Robert Breedlove
Right?
- [57:39]
Michael Saylor
No bridges. If you reject calculus, make a bridge, see what happens. Have at it. There's a lot of stuff in life, if you look back at the guy that did more than anything, probably Isaac Newton is responsible for 90% of just about everything we have around us. And if you rejected Principia Mathematica because you just thought it was inconvenient, you probably rejected 90% of everything that we have today that we hold near and dear.
- [58:08]
Unknown
And natural selection takes care of the rest. Right. If you reject these truths that are uncovered, your it's the end of your legacy in the long run.
- [58:23]
Robert Breedlove
Alright guys, that was episode seven With Michael Saylor here in the Saylor series. And wow, what an episode. We have gone really deep into the topic of bitcoin and I think we had a really strong finish today. So just going to run through a few of the things we talked about. We started out with this concept of bitcoin as a monetary missile, and this took me back to episode one. We were talking about fire, missiles and hydraulics being these primary stone age technologies that allowed mankind to come into dominance in the world. I thought the analogy is very interesting that, you know, using Bitcoin we have this sort of ultimate high ground behind a wall of encrypted energy. We can also accelerate our monetary energy and deploy it anywhere in the world, you know, across any domain nearly instantly with virtually no frictions at all. And so not only does it give us this advantage of asymmetric terrain, but we also get maximal force with how we deploy that monetary energy in the generation of capital. So I thought that was super apt analogy. And then we talked about how that effectively makes Bitcoin the highest bandwidth, price discovery, transparency and security asset in the world, right? So we have this pure money that propagates pure price signals, so it would allow for pure price discovery. All of that is premised on its open source ethos, which is essentially absolute transparency, and that gives it the ultimate security. So there's a bit of a paradox there. It's like by being totally open to inspection, Bitcoin actually resists manipulation or emulation even in that everything about it is out in the open. So it's more equality of its network effects, its liquidity, its first mover advantage. All of these things, even actually the disappearance of Satoshi, which we'll get into a bit later, all of these things sort of wrap this open technology in a, you know, apparently disruption proof casing. So I thought that was really, really powerful discussion points. And as Sailor calls Bitcoin the creature that never sleeps, right? We have this swarm intelligence, if you will, that never stops growing, changing, adapting, trading. You know, it just, it is a fully autonomous and perpetual monetary network competing against these other monetary networks that are rigidly controlled in certain time windows. And you know, to his point, it's like an individual organism has to sleep, but a swarm creature does not. So the swarm creature necessarily out competes the individual organism because it doesn't need to sleep, right? It just keeps adapting and growing, becoming more fit. And you know, as we know from Darwin, it's the most fit competitor that wins out in an ecosystem. And I thought this was a great point too. I never thought of it this way, that in a swarm, the weakest elements are actually weeded out, right? So it's constantly sacrificing its weaker elements to natural selection and thereby strengthening the ensemble. Whereas the individual organism is subject to any singular attack factor. If its defense is penetrated, the whole entity or organism essentially is lost. So in that way, centralized entities are only as strong as their weakest link, or as Saylor says, are constrained by their lowest common denominator. Whereas a decentralized entity like the swarm is going to be strengthened by its highest common denominator. Right? So, and we can think about this. It's kind of like something that learns at the edges. So if one member of the swarm figures out how to effectively deal with a predator or threat, then it will tend to reproduce and its genes will be replicated into the rest of the swarm. So the entire decentralized entity or organism is actually learning at the edges and incorporating those lessons into its whole body. Whereas the centralized entity, if it encounters a predator, that is, it doesn't know how to deal with or even figures out how to defeat it, doesn't spread that adaptivity to the rest of its body. Essentially it's just, it's a one to one relationship versus this one to many. So the one to many gives it just much more intelligence and adaptivity in the long run. And to tie this back to Bitcoin, it's as if to Saylor's point, if any market participant in the Bitcoin network figures out a way to deliver a solution, you know, smarter, faster, stronger, better, that that will, essentially that's where the capital will flow again, because the capital is unrestricted, right? It's not, it is not siloed to any particular jurisdiction or institution. Individuals have maximal sovereignty over their Bitcoin capital, so they can move it anywhere in the world. So in his example of say someone setting up a decentralized or centralized institution in Singapore, for instance, that solved the yield curve problem. So matching lenders and borrowers of Bitcoin in a way that establishes a long term yield curve for Bitcoin, that this would, you know, that would create all of a sudden this risk free rate on Bitcoin, which is the one thing that it lacks is discussed in earlier episodes, to make it a truly pristine collateral that would be competitive to say, US Treasuries. Bitcoin doesn't currently have a yield, but if you could match borrowers and lenders, you could actually create that curve. So the point was say this, we create this 8% risk free rate on Bitcoin on 10 year money. Then all of a sudden, not only have you switched strengthened the which could be used by the way, this, if you had this risk free rate on Bitcoin and you have fiat deprecating it, say 2% a year best case, then this opens up an attack vector on fiat where you could actually go long Bitcoin, short the dollar and squeeze the difference in yield. This is called speculative attack. And this would have the effect of strengthening the speculative attacker himself, but it would also strengthen the holder in Schenectady or whatever town that doesn't know anything about this, just by virtue of more price appreciation pressure being applied to Bitcoin. So more energy being drawn into the network actually benefits all network participants. And this is contrary to a centralized entity. And if you flip this back to the Great Wall of China example, it's like you've inverted that security model. So whereas the Great Wall of China is just a perimeter defense, it doesn't adapt. If you can penetrate any point of it, the whole defensible area is lost. Right. That's actually what happened when the Mongols penetrated the gate. Whereas Bitcoin is effectively this swarm intelligence. Right. So it's, it's any network participant that can figure something out is benefiting the entire network. And then you've also further capitalized or further energized those network participants to go out and solve other problems on behalf of other network participants. So there's this virtuous cycle built right into it that's just not, does not exist with any other form of money. Then we took a bit of a pivot and we got into how human intervention negatively and adversely impacts complex systems. And say we gave the example of, you know, the lions complaining that the antelope are too fast. So the hunter hobbles the antelope, the lions, you know, kill all the antelope, get lazy because they're not being pushed to their limits. So then after all the antelope are eliminated, the lions starve to death and then the hunter blames it on the weather. Right. This is a core concept in Taleb's books where he says that human intervention moves us from what he calls mediocristan to extremistan. Meaning essentially that the non linearity of effects goes through the roof. Once we try to intervene in natural systems because there are all these dynamic equilibria that we're unaware of. And when we offset, you know, we try to press one lever to cause one result, there's A cascade of unintended consequences surrounding that. One common example here is called the cobra problem. Cobra problem. And you can look this up on, say, Wikipedia, but the gist of it is that I forget what country, but they had a problem with overpopulation of cobras. So they passed a law that said it offered a ransom for every dead cobra brought to the government. They give you $10 or whatever it was. And this had the unintended consequence of incentivizing people to actually start breeding cobras and killing them and then to take them into the government and get this reward. So it actually further exacerbated the overpopulation problem and financially compromised the local government. So that's just one example where good intentions go awry and history is just full of these. And to tie that back into money, that's what I guess you could say the central bank or interest rate manipulation. Intentionality aside, we could possibly argue that it was done with the attempt to make things better, right? You can argue both sides of it. Let's just say, for instance, that it was done with good and wholesome intentions to benefit the economy or stimulate demand, or keep prices stable and employment low. Unpredictable. And all these things that still, when you're talking about suppressing interest rates to induce money creation and borrowing, you're going to war with the temporal and energetic principles of thermodynamics. Because again, money is like the price of money. The interest rate is the price of time, right? I'm going to give you money now that you're going to give me back later. There's a price associated with that that you're going to pay me. It's called the interest rate. If a centralized body is artificially suppressing that, you're actually trying to, you know, in sailors, the way sailors, is to reverse the flow of time. Time, you're discounting the price of time. And this has just so many disastrous unintended consequences around it, which we went into. But you're pushing back against thermodynamics, which is the inviolable rule set of the universe. And I would argue that actually trying to suppress the price of time causes us to discount the value of our own time and the time of others. Actually, you can say time or energy again. And I think that is kind of the culprit at the heart of this moral hazard related to fiat currency is that we're discounting time and energy, which is the intrinsic value of human beings effectively. And that's the one case, by the way, where I use the term intrinsic Value, because I do think humans are the only intrinsically value. You can maybe expand that to life more generally, but there's no objects that have intrinsic value. Value is subjective. But life itself as living beings, that seems to be kind of an absolute, is that we should have value for life. Anyways, a bit of a philosophical aside. And in that way, if we're looking at this organism aspect, actually discounting the price of life, and we see all the moral hazard that central banking has created and all the warfare it's funded, it's as if bitcoin is an autoimmune response somehow from society to central banking. Right? And you know, as Saylor said, clearly the message in the genesis block solidifies that. And he goes a little bit deeper actually to say that Satoshi was clearly an individual sensitive to these negative socioeconomic consequences of central banking. And his own sensitivity was a response to the sensitivity of others, right? People that had been marginalized or victimized by the system throughout the ages. And it's as that you could call that like an inform of inflammation, basically the socioeconomic superorganism. And then Satoshi was just the, you know, the cell of the organism that figured it out, right? He figured out the correct response, launched it into the world in the right way at the right time. So I thought that was just really interesting that, you know, there's Brandon Quitum. I talked to him about the fourth turning. He made the point, I haven't actually read this book yet, but he made the point that in these long cycles, there's first, second, third, fourth turning. There tends to come a kind of pivotal moment or innovation or something that comes just at the right time to sort of reverse course. And it feels and seems like bitcoin is definitely becoming that of the modern age. The world is just going one direction on central banking. And we needed some autoimmune response. And it appears bitcoin is that. So I thought that was really fascinating. And then we got into bitcoin as a store of value and I think made very strong arguments. Again, especially when you zoom out to kind of 100 year plus time, time frame that Bitcoin is basically the sole 21st century store value. It just is incomparable to anything else. And this 2020 war on currency and escalating government overreach, this has just pushed an awareness of bitcoin on people and sort of accelerated that autoimmune response in a way. And to just kind of like compare it, you know, real quick as we went through alternative stores of value, you have bonds, but they're now bumping up against the zero bound. And you know, to say those point like it's harder to discern you're being taken advantage of when the natural interest rate is 2% you're getting or 5%, you're getting 2%. But it's much easier for market participants to understand they're getting screwed when there's a negative yield. Right. It just. There's something very special about cross commitment zero barrier. And that's where bonds are at today. So that they're getting quickly decimated as a viable store value because there's no yield equities. They're way overvalued right across all fundamentals and valuation metrics where historic all time highs, PE ratios and EBITDA enterprise value or sorry, multiples on EBITDA or enterprise value, etc. Etc. And that is what I would argue as bitcoiner is a function of we've compromised the store value function of fiat currency. So that function is now the market's figuring out it needs to assign that function to any other asset. And equities are somewhat reliably scarce at least. But this has a perverse effect in that since as Saylor says, the price of equities are delaminating from their fundamentals, right. So they're overvalued in the marketplace that they're actually becoming more and more risky. Right. So there's this perverse effect of the more we use an equity as a store of value, the less effective it is as a store of value in the long run, which is really strange. And Bitcoin is the opposite of that. Right. Bitcoin is actually becoming more secure as a store of value as its price increases and therefore more attractive. And this is an economic concept called the Veblen Good, which you could look up, but basically there are certain assets that actually become. The demand tends to increase as the price increases, which is contrary to most other assets. But I think bitcoin fits that category. Commodities are another alternative. We destroyed those in earlier episodes. I'd say go check that out, check those out. And then finally real estate, which has been a really popular one for the past 50 years, especially in the U.S. but real estate cannot be hidden and it's taxed every year. It's the easiest thing in the world to tax because you can't hide it. That is the dominion over which governments project their power. So I think that there's really high valuations there, plus there's no concealability. So that sort of compromises Real estate as a good store of value. And you know, he makes the point that to be a good store of value, you really want to have a technology that's focused on that function. Right. Equities are, you know, your creating all kinds of other value in the economy, granted, albeit riskily. Right. You have to. They're taking on risk and trying new ventures and figuring things out. Innovating. Property would be a little more stable, but it still has other uses. There's actually utility use there. So the point being, you want a pure store value. That's what gold effectively was. It was the purest store value we had historically. And now that's what Bitcoin is today. And we could say it's kind of like being a single celled organism, right? You don't want to be a vertebrate with all these complex features because the additional features open you up to more risk and attack surface. What you want is something very unidimensional. Single cell just holds value in a trust, minimized way across time and space. And that's what Bitcoin is, right? That is the big breakthrough. So, and that led us into Via Negativa, which is another Tel Avivan concept that I really like. And in a way, you know, this ties back to a quote, actually I heard Saylor tweeted once said, quote, a designer knows he has achieved perfection and there is nothing left to take away. And as we discussed previously, money has five properties, right? Divisibility, durability, recognizability, portability, scarcity. So what did Satoshi do with the creation of Bitcoin? The reason it's so genius and the reason Satoshi is an artist and the reason Bitcoin is effectively a perfected money is because Satoshi took away all of the indivisibility, all of the decomposability, all of the unrecognizability, all of the immovability, and all of the unpredictability from money. He maximally removed all of these negative aspects of money to deliver us the quasi perfection that is Bitcoin. And that speaks again to this minimization of attack surface. You've reduced all of kind of the features of money to stripped it down to its bare bones, just its bare monetary properties. And you've taken away all the negative aspects from those properties, so you've effectively perfected those properties. And this speaks again to Bitcoin's resistance to disruption, right? So we've achieved attack surface minimization via monetary property optimization. So this is via Negativa. Right. The more you take away what you have left, it becomes more valuable, essentially. So I thought that was just really interesting way to look at it. And another way to say that is we commonly hear that, oh, this new crypto asset can do this or that, that bitcoin can't do. But the lesser feature set of bitcoin is a feature itself, not a bug, right? Because its whole value prop is survivability, right? It cannot be stopped. It is just perfected store value that adheres to 21 million. And no one can shut down the network, right? No political or military action can shut down the network. That is the core value prop of Bitcoin. That is what it optimizes for. And as Saylor puts this again in one of his tweets, he says, bitcoin has no country, has no company and has no competitor, right? So that's what makes it so special, is that it's something that actually exists beyond us, which turns out to be really important. And I would add to that, too, that bitcoin also doesn't have an. We'll say this bitcoin has no identified creator, right? We know it's Satoshi, but no one knows who Satoshi is. We don't have this person to point toward. And the absence of that personality, the creator, actually, I would say, gives bitcoin mythological bedrock, right? Which really underpins decentralization. If we knew Satoshi and he was in the news every day and he was out getting drunk at the bar or something, you know, and everyone knew he had a million coin, it would just open him up to a lot of attacks, would call a lot of things into question, that his disappearance basically nullified. So the, you know, this godhead of bitcoin we call Satoshi, I think really reinforces the value proposition of survivability and decentralization. And that gets us into what I thought was the most interesting part of the discussion today. And that was when Saylor pointed to the fanaticism of bitcoin maximalist as an asset, right? As a contributing factor to the value of the bitcoin network. And I love this, the analogy where the defenders of 21 million, effectively the network participants themselves, we are the keepers of the flame, right? We are the mythological keepers of the flame. And the point being there to preserve an institution adequately over time, you need adherents or fanatics, if you will, that are so convicted in their belief that they're willing to flee persecution to preserve the institution, right? And he drew the analogy to people coming to the US People came to the US Largely to practice religious freedom. Right. People wanted a refuge that they could freely put their spiritual preferences above politics effectively. And the US provided that. So I thought that was super interesting. And then to bring it forward a bit, it's. We're seeing the faith shaken in existing institutions worldwide. Right? Whether it's your government, bank, all these legacy institutions, faith has been severely shaken, especially in the wake of COVID which Saylor made a great point. Even like at the universities where no one's going to campus anymore and they're taking courses online, you're reducing the affiliation with the brick and mortar university and you're strengthening the affiliation with the digital university. Right. So that the institutions and companies and brands that adapt to the digital age more quickly will actually benefit more at the expense of legacy institutions. And so that's a mega political trend that's underway. Excuse me. And the flame for bitcoin, if you will, is kept between the nodes, the miners and the holders. And I love this, you know, which are basically preserving this dynamic equilibrium centered on 21 million. And I love this the analogy of worshiping at the altar, where people in the past all worshiped at the altar. They would actually feed the flame even by tithing, say 10% of their income. So they're funding this religious institution. They're also preaching these values to their contemporaries or their kids. So they're passing these values forward in time using both money and language, which I thought was very interesting. And ritual, I would add that. And so in the bitcoin world, we've got miners energizing the fire, right? They're adding additional energy to the network that is its security budget. Effectively. You have nodes protecting the fire, which are basically selecting the rule set that the miners are enforcing. And then we have the holders themselves, which are the fire. They're the living flame that's centered around 21 million. So it's like this group of people, this social layer that's all oriented to preserving 21 million, which benefits everyone and intertwines everyone's fate. And each one of those is just another element in this composite fault tolerance structure that we call bitcoin. So it's this radically new way to think. Think about it as more of a religious like institution. And maybe you can even say that nodes, miners and holders are kind of like the holy trinity of bitcoin, right? Maybe 21 million is the God or something that they're oriented around. Might be a stretch, but I thought I'd mention it nonetheless. So bitcoin as a religion Question comes naturally, what are its values? And as Saylor declares, truth, natural law, thermodynamics, self reliance, honesty, fairness, technology, self sovereignty, all of these things are embedded in the value systems of true bitcoiners. And they carry that into the world, I think, in their word and their deed, in their investments. And, you know, I just can't think of a more robust, powerful, effective, well organized group of people in the world than the bitcoiners I've interacted with. You know, I've said it before, there's nothing in the world that makes me more bullish on bitcoin than bitcoiners. And, you know, again, if we go back to the purpose man, or at least what distinguishes him and makes him superior to other animals, it's our ability to channel energy across space and time. And I love this point. So energy begets life. So bitcoin as being this tool for immortalizing the channeling of energy, we can channel it across space and time any direction we want, with essentially no loss. That 21 million or Bitcoin itself, it's actually, in a way, kind of the pursuit of immortal life, right? We're pursuing a medium that maximally preserves energy across space and time. So it's like, well, of course, it's a religious institution. We're pursuing a mortal life. Not immortal life in the sense like you live forever, but a network or institution that lives forever for the betterment of all and one in which you can project your own wills and values beyond your own life. And, you know, the example there was like, the Saylor foundation, which is his value. Saylor's own personal value system is free education for all. Right? He thinks that is something that's really important for the human race. And now with bitcoin, he has a way to finance and project those values beyond his own life. He can now do something to fund and strengthen this institution beyond his own life in a way that was not possible before bitcoin. And you could kind of say that this is a way of him projecting values and willpower and intentions and preferences into his own afterlife, if you will, doesn't mean up into heaven, but just beyond his own life. So I thought that was really interesting. And then we touched on, you know, again, another way, another religious aspect of this is that 21 million is truly transcendent, right? It is something no one can do anything about. And I think that speaks to its religious qualities in a way as well. And he had this great quote, said, if you worship science, the laws of physics, thermodynamics, and mathematical clarity, then bitcoin is your religion. I thought that was beautifully said and it points back to us again. It's like the strength of bitcoin as a store of value, as money is rooted in the faithfulness of its adherence.
- [89:18]
Michael Saylor
Right.
- [89:18]
Robert Breedlove
Of its believers, if you will. So it is up to all of us to preserve the principles embodied in those fields of study. And that's what bitcoin is. And then we concluded with which I thought was a great point, is perhaps economics through all of history was just more of a political preference or a very much more of just a social science. Right. Even in Austrian economics, there's very little use of objective measurements because there are no constants in human action effectively. But it seems like with Bitcoin we do have this collision, this collision of, call it computer science and everything underpinning that with the softer social science of economics. So maybe this is the emergence of something really different and unique, right? Like a true or not a more objective economic science. You know, we're still these things like value, supply and demand. You know, supply is the objective side, demand is the subjective side. These things are still going to be, they're still going to hold the same qualities. But the introduction, absolute scarcity and a money that cannot be monopolized and resist corruption certainly changes the game. Right. I don't know that it will cause us to rewrite the history books per se, but we will move more towards this engineering like mindset, I think in the field of economics. So I thought that was really, really great way to put it. Excuse me. So, yeah, that was it, man. It was monster episode. I hope you guys enjoyed that. I, you know, 1, 2 and 3 built a lot of foundation. I think 4, 5 and 6 really started to build some crescendo here. And 7 was a big peak for me personally, especially the later stages of this discussion. I definitely think we're rooting around the bottom of the bitcoin rabbit hole. Hope you guys enjoyed this and I'll see you back here soon for the next one.